Analysts Expect Trevali Mining Corporation (TSE:TV) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Trevali Mining Corporation's (TSE:TV) future prospects. Trevali Mining Corporation, a base-metals mining company, engages in the acquisition, exploration, and development of mineral properties. The CA$193m market-cap company announced a latest loss of US$239m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Trevali Mining will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Trevali Mining

Trevali Mining is bordering on breakeven, according to the 6 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$41m in 2021. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Trevali Mining given that this is a high-level summary, but, keep in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Trevali Mining is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Trevali Mining's case is 59%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Trevali Mining which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Trevali Mining, take a look at Trevali Mining's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is Trevali Mining worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Trevali Mining is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Trevali Mining’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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